Monterey County can challenge regional project agreements

San Francisco >> A San Francisco Superior Court judge has ruled Monterey County will be allowed to challenge the validity of the agreements at the heart of the failed regional desalination project.

Judge Curtis Karnow ruled Tuesday that the county can file a cross-complaint in the lawsuit aimed at unraveling the three-way partnership backing the $400 million desal project, which fell apart in the wake of revelations regarding former county water board member Steve Collins' dual role on the proposal.

County Counsel Charles McKee hailed the ruling by Karnow, which essentially agreed with the county's argument that the statute of limitations on challenging the project agreements due to Collins' conflict of interest had not yet expired. The county has argued the agreements were voided by Collins' actions.

Karnow gave the county six days to file its cross-complaint in the lawsuit, which was initially filed by California American Water in an effort to seek a court ruling on whether the project agreements were still valid and who should be responsible for tens of millions spent on the proposal. Cal Am has since allied with the county, and has reached a pending settlement agreement that includes repayment of up to $3.5 million in the county's project costs and an agreement by the county not to attempt enforcement of its requirement that all desal plants be publicly owned against Cal Am's new proposed desal project.

Marina Coast Water District attorneys had argued the project agreements were still valid and could not be challenged because the 60-day statute of limitations had expired. Karnow ruled that a four-year statute of limitations applied because of the Collins conflict.

Collins pleaded no contest last month to a conflict of interest charge, among other charges, for accepting $160,000 from Marina Coast Water District consultant RMC Water and Environment for work he did during 2010 helping create and promote the regional project.